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Trends in housing finance show the continued rise of owner occupiers and first home buyers, led by Queensland

Trends housing finance

The volume trends of finance secured for the purchase of property experienced a strong rebound in the September quarter, following the initial shock to demand housing in the first two months of the June quarter.

The latest ABS housing finance data shows the volume of finance lent for the purchase of property increased 5.9% in the month of September, taking the quarterly increase to 20.0%, the highest quarterly growth rate on record.

It follows a 10.9% contraction in housing finance through the June quarter, when strict social distancing restrictions, such as a ban on open home inspections and on-site auctions, resulted in a sharp drop in transactions.

Trends housing finance

 

Housing finance for the purchase of property totaled $62.7 billion in the September quarter.

This is the highest level since the March 2018 quarter and is just 6.6% below the peak of the lending series in the three months to May 2017.

The uptick is a result of eased social distancing restrictions across the country, which have coincided with historically accommodative monetary policy, which sees mortgage rates at a record low.

As with the strong bounce-back in many economic indicators over the September quarter, eased social distancing led to a rise in consumer sentiment and an increase in sales and listings volumes. CoreLogic estimates that sales volumes increased around 27.7% in the quarter, despite renewed restrictions across Victoria.

The CoreLogic Residential Mortgage index (RMI) indicates further increases in housing finance over October and November.

The RMI tracks changes in valuation activity across CoreLogic platforms for the purpose of dwelling purchases.

In the 28 days ending 8th of November, the CoreLogic RMI rose 26.9%.

As can be seen in the chart below, the RMI is a leading indicator of monthly ABS housing finance commitments in the owner-occupier segment.

Trends housing finance

Queensland leads growth in housing finance

Of the states and territories, Queensland accounted for most of the increase in lending for the purchase of property.

The value of housing finance commitments (excluding refinancing) increased 40.2% in Queensland over the September quarter, accounting for around 31% of the uplift in finance nationally.

This was followed by NSW, which contributed 30% to the uplift nationally, as the state saw a 16.7% increase.

Western Australia had the largest increase in housing finance for the purchase of property over the September quarter, rising over 55%.

This further supports the view that the WA and Perth dwelling markets are resuming an upswing following the disruption of COVID-19.

Trends housing finance

 

 

The post “Trends in housing finance show the continued rise of owner occupiers and first home buyers, led by Queensland” by Eliza Owen appeared first on the propertyupdate.com.au Blog

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Brisbane

Mirvac Sells Golden Triangle Tower for $87m

Golden Triangle Tower

Melbourne-based property fund manager Forza Capital has picked up a prominent office building in Brisbane’s “Golden Triangle” from Mirvac for $86.7 million.

The property, located at 340 Adelaide Street—on the corner of Adelaide and Wharf Streets, comprises 12,800sq m of B-Grade office space across 17-levels, together with a ground floor cafe and parking for 100 cars.

In recent years, Mirvac has refurbished the building, upgrading the lobby and repositioning the external ground plane and retail.

Mirvac chief investment officer Brett Draffen said the proceeds from the sale will be redeployed into prime and A-grade commercial assets as well as its $22.4 billion development pipeline across the residential, office and industrial sectors.

The deal, negotiated by CBRE’s Flint Davidson, Tom Phipps and Bruce Baker, represents an 11 per cent premium to its book value in June.

“As the first major, post-Covid capital markets transaction in the Brisbane CBD, this deal highlights the demand from onshore investors for quality office assets,” Phipps said.

Golden Triangle Tower1

The building is 93 per cent leased to tenants Covermore, Cerebral Palsy League and Oracle, and has a weighted average lease expiry of 3.8 years. Image: Supplied

“As travel restrictions ease we expect the market to awaken in the first half of next year fuelled by historically low financing costs and Brisbane’s attractive yield spread.”

Forza Capital director Ashley Wain said the asset represented exceptional value, given the building’s comprehensive refurbishment program, and was transacted with a high degree of certainty over a period of one month.

“Shortly after Covid struck, [we] identified the opportunity to prepare our investor base of sophisticated investors for opportunistic property investments.

“Speed to transact was anticipated to be critical and we believed getting early capital commitments and being able to transact quickly would be paramount to securing new investments on attractive metrics,” Wain said.

The acquisition represented $52.5 million of equity from Forza’s client base of family offices, high net worth advisory groups and individuals, and will now sit in the newly-established Forza 340 Adelaide Street Fund.

“The uncertainty in office investment markets has created really attractive investment metrics which, when combined with highly competitive debt funding, results in a target 8 per cent per annum distribution yield over the first five years of the investment,” Wain said.

Last week, Dexus listed a neighbouring A-grade office tower, located at 10 Eagle Street, with price expectations of $300 million.

 

The post “Mirvac Sells Golden Triangle Tower for $87m” by Ted Tabet appeared first on the theurbandeveloper.com Blog

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Brisbane

Yeronga trophy home fronting the Brisbane River listed

Brisbane River

A riverfront Yeronga, Queensland trophy home has been listed without a price guide.

The five bedroom, five bathroom abode is being marketed by Heath Williams and Nick Hurwood of Place.

Situated at 363 Brisbane Corso, the tri-level home fronts the Brisbane River.

Set on 916 sqm, it features two swimming pools and a private boat pontoon.

Other features include full-height stacked glass sliding doors opening out to a covered balcony which capture sweeping Brisbane River views as well as a ground-level rumpus or games room equipped with a bar, a projector and a linked balcony.

It is located seven kilometres from the CBD.

 

The post “Yeronga trophy home fronting the Brisbane River listed” appeared first on the propertyobserver.com.au Blog

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Brisbane

Mirvac offloads Brisbane office building for $87m

Mirvac office building

Mirvac has offloaded a 17-storey office building in Brisbane to Melbourne-based property fund manager Forza Capital for $86.75 million in one of the first institutional grade office deals to take place in the city since COVID-19 struck.

The building, which is in Brisbane’s ‘Golden Triangle’ at 340 Adelaide Street, had undergone an extensive refurbishment by Mirvac and sold at an 11 per cent premium to its last book valuation in June.

The property, which is 93 per cent leased to tenants such as Oracle, Cover-more Insurance and the Attorney General’s Office, has a 3.8 year weighted average lease expiry.

Brett Draffen, chief investment officer at Mirvac, said proceeds from the sale would be redeployed to grow its asset creation business and would allow the group to “capitalise on opportunities to create Australia’s next generation of workplaces, residential communities and mixed-use precincts”.

The office tower is the first asset to be acquired by Forza Capital following a $240 million capital raising from its client base of family offices and high net worth advisory groups in September and will sit in the newly established Forza 340 Adelaide Street Fund.

Forza Capital director Adam Murchie said they had advised their investor base to be prepared for opportunistic property investments shortly after COVID-19 had struck.

“Speed to transact was anticipated to be critical and we believed getting early capital commitments and being able to transact quickly would be paramount to securing new investments on attractive metrics.”

Forza Capital director Ashley Wain said the uncertainty in the office market had created attractive investment metrics.

“When combined with highly competitive debt funding [the metrics] result in a target eight per cent per annum distribution yield over the first five years of the investment.”

The deal was negotiated by CBRE’s Flint Davidson, Tom Phipps and Bruce Baker, and Matt Lawrence arranging the debt.

“As the first major, post-COVID capital markets transaction in the Brisbane CBD, this deal highlights the demand from onshore investors for quality office assets,” Mr Phipps said.

“As travel restrictions ease we expect the market to awaken in the first half of next year fuelled by historically low financing costs and Brisbane’s attractive yield spread.”

 

The post “Mirvac offloads Brisbane office building for $87m” appeared first on the afr.com Blog
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